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DANBURY, Conn. - FuelCell Energy (NASDAQ:FCEL), a clean energy company with a market capitalization of $155 million and currently trading at a modest 0.24 times book value, has launched a pivotal testing phase for its solid oxide electrolysis cell (SOEC) system at the Idaho National Laboratory (INL), the company announced today. The test aims to validate the system’s ability to produce hydrogen with 100% electrical efficiency using nuclear energy. According to InvestingPro analysis, the company shows promising potential despite recent market challenges, with 17+ additional insights available to subscribers.
The INL, known for its work in nuclear research and renewable energy innovations, is conducting the study in partnership with FuelCell Energy. The project, which received funding from a U.S. Department of Energy Office of Nuclear Energy award in 2020, explores how nuclear plants can diversify their operations by alternating between electricity production and hydrogen generation, potentially enhancing their economic viability. With a strong current ratio of 6.01 and more cash than debt on its balance sheet, FuelCell Energy appears well-positioned to support this innovative project.
FuelCell Energy’s SOEC system, the largest electrolyzer to undergo testing at INL, is projected to demonstrate a reduction in the cost of clean hydrogen production. By converting both electricity and water into hydrogen with no carbon emissions, the system could reach unprecedented levels of efficiency when integrated with nuclear power plants. The electrolyzer is expected to produce 150 kilograms of hydrogen daily using 250 kilowatts of electricity derived from nuclear energy.
Jason Few, President and CEO of FuelCell Energy, emphasized the significance of pairing the company’s electrolyzer with nuclear facilities, stating that it exemplifies the comprehensive energy strategy required to support the increasingly strained electric infrastructure. He pointed out that such integration ensures every kilowatt of power is transformed into a useful or storable energy resource, enabling 100% smart energy utilization.
The unique aspect of FuelCell Energy’s electrolyzer lies in its ability to achieve full efficiency when supplemented with external heat sources, such as waste heat from a nuclear reactor. This capability could potentially lower hydrogen production costs by up to 30%, addressing the economic barriers to widespread hydrogen adoption.
During the INL testing, real-world scenarios will be examined, including the application of thermal energy from a nuclear reactor, grid dynamics, and a nuclear reactor control simulator. The outcomes of this testing are anticipated to contribute to the advancement of nuclear and fuel cell hydrogen technologies, fostering the creation of more abundant energy sources.
FuelCell Energy, a pioneer in clean energy solutions, has been operational for over 20 years, offering a range of applications for its fuel cell technologies, including power support for the electric grid and on-site distributed baseload power for various industries. This testing phase at INL is based on a press release statement and marks a significant step in the company’s ongoing efforts to innovate in the field of clean hydrogen production.
In other recent news, FuelCell Energy has secured a substantial $160 million contract to construct a 7.4 MW fuel cell power plant in Hartford, Connecticut. The power generated from this facility will be sold under a 20-year power purchase agreement with local utilities Eversource and United Illuminating. The company’s latest financial results revealed fourth-quarter revenue and EBITDA of $49.3 million and negative $25.3 million, respectively, surpassing both B.Riley’s and the Street’s expectations.
FuelCell Energy’s executive compensation details were disclosed recently, with President and CEO Jason Few set to receive $1,158,300 as part of the Long Term Incentive Plan awards for the fiscal year 2025. The company also announced the appointment of Shankar Achanta as Executive Vice President, Chief Product and Technology Officer.
Analyst firm TD Cowen has raised the price target for FuelCell Energy to $12.00 from the previous $2.00, following the company’s announcement of solid fourth-quarter results. Meanwhile, KeyBanc Capital Markets maintained its Sector Weight rating on the company’s shares, awaiting stronger demand trends before altering its rating.
FuelCell Energy has made significant progress, having shipped six out of 42 modules to GGE during the last quarter. The company’s solid oxide platform is scheduled for shipment in early 2025. In addition, the company announced a global restructuring plan aimed at reducing operating costs by 15% in the fiscal year 2025.
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